M&S chairman Archie Norman reportedly advised Wesfarmers against buying Homebase on the grounds that it would be difficult to integrate with Bunnings’ model.
Retail veteran Norman, who is an adviser to Wesfarmers, wrote an email to the Australian retail giant’s chairman and chief executive outlining his reservations about the acquisition of Homebase prior to the deal going through.
One person close to the deal told The Financial Times that Norman “wasn’t in favour of the transaction, which he believed would not move the dial for the group and therefore wasn’t worth the risk.”
Wesfarmers, which is set to release its interim results next week, is mulling exiting the UK after revealing a AUS$1bn (£560m) write-down relating to its £340m acquisition of Homebase in 2016.
The group’s Australian managing director Rob Scott revealed earlier this month that the retailer was set to close up to 40 stores of its UK stores, and conceded that a lot of the issues Bunnings’ UK division faced “were self-induced”.
According to another person close to the situation, Norman also spoke to Wesfarmers’ former managing director Richard Goyder expressing his concerns prior to the Homebase deal finalising.
Norman reportedly warned that Homebase was already struggling in the UK DIY market and would be difficult to integrate with Bunnings’ Australian model of larger stores and a wider product range.